Rochester Ferry Contracts May Cost $3.1M

Monday, January 16, 2006

Rochester city officials estimate that they will need $3.1 million to buy out existing high-speed ferry contracts or continue them if necessary, according to legislation before City Council, according to the Rochester Democrat & Chronicle.
The amount is included in an expense list justifying the mayor’s request to borrow $9.4 million from the city insurance reserve and close out ferry operations. Other expenses include repaying manager Bay Ferries Great Lakes LLC, which is owed $2.5 million; payments on the $40 million borrowed to buy the ship and begin operations last year; and maintenance, personnel and insurance until the ship is sold. The latter expenses are just an estimate and assume that the boat will be here through the fall.
The total loan requested is slightly reduced from the mayor’s initial estimate of $9.5 million. The $9.4 million would be reimbursed once the ship was sold.
The city was shutting down the ferry after a season in which the operation lost $10 million in 10 months. The city bought the ship at a federal foreclosure auction after the initial operator halted ferry service in 2004.
An initial projection of $2.7 million due on the initial loan has been reduced to $1.5 million, the latest estimate as city officials finalize revised terms with their lender to minimize the effect on the city and taxpayers. These terms would include a postponement of the first principal payment from 2007 to 2008 and an extension of the term of the loan to 2021.
(Source: Rochester Democrat & Chronicle)